 The MTN Group is a 15 year old company and is the largest

telecom company in South Africa.

 Launched in 1994, MTN Group is a multinational

telecommunications provider, with its major operations in 21
countries in Africa and the Middle East.

 MTN's vision is to be the emerging markets’ leading

telecommunications provider. Its strategy is built on three
pillars: consolidation and diversification; leveraging our
footprint and intellectual capacity; and convergence and
operational evolution.

 Shareholdings of the company is widely held by The Mikati

Family of Lebanon over 10.18%, employee controlled New
shelf 14.87% and Government- controlled public investment
corporation holding around 21%.
 Bharti Airtel is India’s largest telecom business operator.

 Its CEO is Sunil Bharti Mittal.

 Currently offering telecom services to over 107 million
subscribers.
 Provides Fixed wireless services using GSM technology
across 23 circles.

 Provides Internet Broadband services over DSL in 14

circles.
 The Airtel network spans over 67,138 kms covering all
major cities in India.
 Bharti-Airtel plans to acquire 49% of MTN in return for
36% economy stake in Bharti, of which 25% will be held
by MTN and remaining 11% directly by MTN
shareholders.

 After collaboration, Airtel would have governance

rights in MTN, enabling it to fully consolidate the
accounts of MTN.

 MTN shareholders have demanded that Bharti-Airtel

pay more for MTN equity.

 MTN will issue new Shares.

 Bharti-Airtel would acquire 36% of MTN’s paid up
capital @ $ 10.2 per share entailing a cash out go of $
6.8 billion.

 In return Bharti-Airtel will issue 0.5 GDR’s for every

MTN share it acquires.

 The Indian promotors will see a dilution of 45.30%

stakes in Bharti.
 Bharti-Airtel is currently into merger talks with
Mobile telephone Networks Group.
 In 2008, along with Bharti-Airtel, Reliance
communication was trying to strike a deal with the
MTN Group.
 In the year 2008, talks with MTN failed due to
disagreement on the structure of the deal.
 Talks between the two giants have resumed since 25th
May, 2009. This is the second time the two company’s
have come together to strike a deal.
 Discussions between the two companies regarding
the potential transactions continues to progress , and
the meeting dates have been extended till 30
september,2009.
 Government Support:

◦ The governments of both the countries are in favor

of this deal and are supporting it whole heartedly.

◦ The SOUTH AFRICAN government said that it

supported the proposal merger of Bharti-Airtel and
the MTN group in principle.

◦ The Indian Government agreed that a deal like this

would be a good example of enhancement of
cooperation in trade & investment between two
countries.
 Government Interventions:

◦ Senior officials from South Africa visited India to

officers in the finance ministry, Reserve Bank of India
and SEBI. South African government stated, that it
does not as policy, allow companies to be
incorporated with offshore companies.
 The talks have run into difficulties as both MTN
and Bharti-Airtel are insisting on maintaining
their separate identities after the tie up.

 MTN insisted that after merger, Bharti-Airtel

should become a subsidiary of MTN group.

 However Bharti-Airtel supported the deal as it

wanted to become a global company, not a
subsidiary.
 Bharti-Airtel would become the largest stakeholder in
MTN group.
 A merger entity would have U.S. $20billion in revenue
and 200 million customers.
 Bharti-Airtel will have governance rights in MTN group,
enabling it to fully consolidate the accopts of MTN.
 Bharti-Airtel would become the primary vehicle for the
expansion of both Bharti and MTN group in Asia. While
MTN would focus on expansion in Africa and Middle
East.
 After the merger, Bharti-Airtel will become the 3 rd
largest telecom company in the world after Vodafone
and China Mobile.
Shubham Bhatnagar
MBA Section – B
Enrollment No. - 121